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Near-term upstream investment slashed by US$370 billion since oil price fall


Near-term upstream investment slashed by US$370 billion since oil price fall

Report summary

It is two years since the dramatic fall in oil prices, and the impact on upstream development investment has been enormous. Since Q4 2014, we have removed US$370 billion (30%) of capital expenditure across 2016 and 2017. Looking further out to 2020, the number is approaching double that. The deepest cuts are in Lower 48, where capital investment has halved in 2016-17, falling by US$125 billion since 2014. The Middle East has generally been less impacted - with no drop in Saudi Arabian investments in 2016/17.

What's included?

This report includes 3 file(s)

  • Near-term upstream investment slashed by US$370 billion since oil price fall PDF - 364.67 KB 7 Pages, 0 Tables, 5 Figures
  • 16 5 Global capex data by region.xls XLS - 48.50 KB
  • 16 05 Near-term upstream investment slashed by US$370 billion since oil price fall.pdf PDF - 952.13 KB

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

This report helps participants, suppliers and advisors understand trends, risks and issues within the upstream oil and gas industry. It gives you an expert point of view to support informed decision making.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research.

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  • Deepwater investment plunges by nearly 40%
  • Oil sands – high breakevens prompt spend reduction by a quarter
  • LNG – first signs of price impact
    • Percentage capex reductions by theme from Q4 2014 dataset to Q2 2016 dataset
  • Russia and the Caspian region – rouble depreciation and mega-project delays
  • Middle East and North Africa proving more robust
  • Mature North Sea hit hard
    • Percentage total capex changes by region from Q4 2014 dataset to Q2 2016 dataset
  • Cost deflation is the key to new investment
  • Production impact biggest in the US
    • Drop in forecast US Lower 48 liquids and gas production by year since Q2 2014
    • Drop off in Pre-FID conventional greenfield projects total production by year since Q4 2014*
  • Outlook

In this report there are 5 tables or charts, including:

  • Deepwater investment plunges by nearly 40%
  • Oil sands – high breakevens prompt spend reduction by a quarter
  • LNG – first signs of price impact
    • Near-term upstream investment slashed by US$370 billion since oil price fall: Image 2
  • Russia and the Caspian region – rouble depreciation and mega-project delays
  • Middle East and North Africa proving more robust
  • Mature North Sea hit hard
    • Near-term upstream investment slashed by US$370 billion since oil price fall: Image 3
  • Cost deflation is the key to new investment
  • Production impact biggest in the US
    • Near-term upstream investment slashed by US$370 billion since oil price fall: Image 4
    • Near-term upstream investment slashed by US$370 billion since oil price fall: Image 5
  • Outlook
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